Executive Summary This is a new age in our economy: consumers are focusing more on value then spending. Shoppers are considering frugality to be trendy Make frugality a habit Marketers fear that Frugality may be here to stay.
Consumer Frugality Recession has impacted the way Americans purchase goods. “Stretching Money” (Getting more bang for your buck) Cheap is Cool. Marketers need to develop deeper insights into the consumer.
New ConsumerMiddle class families have been effected the most byfrugality (ages 25-35)Touting their frugality Becoming a lifestyleNew consumers find the best dealsRetail Industry will be permanently effected Must lower their prices
How Consumer FrugalityImpacts Marketing Shopping out of their closets Era of conspicuous consumption in America is over People are more disciplined in their spending Marketers must redefine their brands Consumers are suppressing spending urges Making better use of their possessions
How Marketers PlanSuccessful Strategies Marketers must make a deeper connection to the consumers Dollar General found original roots as an honest and casual brand Listened to the customers (ult. Lowered prices) Must add a new dimension: fresh To refresh the brand
Which Strategies are Likely toFail Adding value of price on a product of service If you do not match or better another companies promotion, your business is likely to fail Must create an experience for the customer Mass marketing likely to fail Shopping is much more simple, with less process
Companies Benefit fromFrugality? Expanding product lines to reduce cost can be a winning retail strategy Hallmark Create brand loyalty Focus on value by companies Businesses are learning to adapt to this frugality to benefit themselves Promoting in store brands like Safeway Select
Company Struggling in theEconomy Aeropostle introduced similar style to Abercrombie with lower prices Higher-end retail companies like Abercrombie & Fitch are doing poorly Why purchase that product (Jeans) for $100 when an off brand with the same style is cheaper Consumers buy it for an “image” not the product
Marketing Plan “Going Green” Customers feel more inclined to purchase a product if it is Eco-friendly or for a good cause Consumers are interested in efficiency Bonus rewards for loyal customers; more convenient (product is a bargain) Consumers want to know what you can do for me
In Conclusion Frugality in the Consumer is here to stay If Companies do not adapt to this new less- trendy lifestyle, then ultimately they will suffer. Cheap is Cool.
Work Cited Benady, David, and Mary-Louise Clews. "New Era of Frugality Dawns." Editorial. MarketingWeek11 Dec. 2008: 78. Business Source Premier. Web. 3 Nov. 2010.<http://we.ebscohost.com/ehost/delivery?vid=6&hid=13&sid=7d9f4...>. Crossan, Jane. "Is the Economic Storm Over? Consumers Weigh in on the "New Frugality"" Business Source Premier. EBSCO, Nov. 2009. Web. 17 Nov. 2010. Davis, Jill, ed. "Redefining Retail Brands in an Age of Frugality." Business & Company Resource Center. 2009. Web. 7 Nov. 2010.